Wednesday, July 29, 2009

Almost Jimmer, Almost

I've sort of been out of the loop, but I managed to read Flaherty's latest prognostications on the economy. For the first time I can remember, it seemed the Jimmer had it right, optically speaking. WHOA on this end of recession talk, Flaherty took a prudent, understated stance, that effectively set up the Conservative storyline moving forward. For months and months the government has continually been behind the curve, stubbornly holding on to outdated language and circumstance, only to humbly come before the mics weeks later to admit they had it wrong. This time, Flaherty didn't overstate the reality, in fact he lowered expectations with a sober outlook. Flaherty was managing the message, to the point he actually looked competent. But, just when he finally sang in key, Day reverted to Conservative form:

Finance Minister Jim Flaherty warned Tuesday that it's too early to declare the recession over, despite a recent Bank of Canada forecast that the economy stopped shrinking this quarter.

His comments came on the same day that the number of people on employment insurance benefits surged to its highest level in more than a decade.

But on Wednesday, Liberal finance critic John McCallum drew attention to a column written by International Trade Minister Stockwell Day in which Day contradicted his cabinet colleague.

``I'm not kidding. The recession is over,'' Day wrote the Penticton Western News, noting the rosier outlook recently put forward by Canada's central bank. In a quarterly outlook released last week, the bank raised its forecast for GDP growth in the current quarter to 1.3 per cent on an annualized basis, after three straight quarters of decline.

Whether or not the recession is technically, statistically, over is irrelevant to the Conservatives. What does matter is not letting people get too excited about the prospects for recovery. While the worst may be behind us, and the maddening "shoots" talk finds worth, the government MUST remain cautious- a balancing act that highlights brighter days, but doesn't seem to be ahead of itself. Flaherty's dampening language provides cover for the Conservatives, it's actually quite shrewd. Too bad then that Day is planning the parade route, because that over zealous proclamation can come back and bite you in the ass. Flahery looks like he's FINALLY learned the lesson, but that's undermined by this conflicting optimism from Day. Not a good day, for a party that prides itself on tight message control.

When it might actually get something right it screws up the message to the point where no one can really know what to believe.

At any rate Mr. Flaherty is correct this time. You just need to look at the economic data from the US today to see they are not out of their recession. If they are still in a recession it is highly unlikely Canada can have pulled out of their yet.